Opposite Roles

Happy National Opposite Day!! Yes, it’s today! I bet you didn’t even know there was such a day, did you? It seems the hop and brewing industry are ahead of the times. For at least the past 6 months, members of the hop and craft brewing industries are playing opposite roles. Here’s an example … Today, it makes more sense for merchants to buy hops from big craft brewers than it does to buy them from growers. Many of the largest craft brewers in the country have more hops than they need and are desperately trying to sell hops. On the other hand, some hop growers, despite the slowing growth of craft beer, are planting more hops this spring. Could there be a better example of a time when somebody did the opposite of what they should be doing?

Is the situation hopeless? Should we prepare for Hopageddon? No … all is not lost. There are still breweries that need hops. They didn’t participate in the hop orgy the big craft breweries enjoyed when they thought the party would go on forever. Just as with beer, there’s a hangover when you have too many hops. Anybody who buys or sells hops for a living knows exactly what I’m talking about. The big craft breweries feel the effects of that hangover today. Unfortunately, there is no pill to take to make the problem go away.

When one big brewery has “some extra hops” it can take 50 smaller breweries needing that same variety to fix the problem. That’s 50 times the effort, 50 times the time and 50 times the expense to sell those hops … a second time. Growers and merchants who prefer to sell to the big craft breweries are not prepared for that level of increased transactional cost (that’s what they call it). The big craft breweries’ problems, like their successes, are big and they messed up … bigly.

If you aren’t a brewer sitting on a mountain of inventory, you still should not want prices to crash. Do you know what happens when prices crash? Quality crashes. Sustainability crashes. The number of varieties crashes. Selection crashes. Hops can be very cheap, but that comes at a very expensive price. You don’t want that … Not even on National Opposite Day.